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Closing Bell With Maria Bartiromo

News/Business. Maria Bartiromo. Analysis of the day's winners and losers in the stock market. New.

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01:01:00

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mpeg2video

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ac3

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704

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Us 21, America 11, Boston 10, Stacy Smith 9, Capex 5, S&p 5, Jon Fortt 4, Garth 3, Bjorn 3, Fbi 3, Nick 3, Carol 3, Josh Lipton 2, Blackrock 2, Intel 2, Derrick Chan 2, Lee 2, Hampton Pearson 2, Johnson & Johnson 2, Nbc News 2,
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  CNBC    Closing Bell With Maria Bartiromo    News/Business. Maria Bartiromo. Analysis of the  
   day's winners and losers in the stock market. New.  

    April 16, 2013
    4:00 - 5:01pm EDT  

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>> thanks, peter. see you later. that's first hour of the "closing bell." stay tuned, a lot more to come. got those earnings from intel and yahoo! coming up, plus much more on the second hour of the "closing bell" with maria bartiromo. i'll see you tomorrow. and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. stocks surging on wall street, gaining back half of yesterday's losses. finishing out the high of the afternoon with another gain on the day of 156 points. that is up better than 1%, at 14,738 on the dow. nasdaq picks up 48 points, 1.5%, and the s&p 500 higher by 22, also 1.5%. we're in earnings mode right now. we are awaiting earnings from intel and yahoo!. our jon fortt is going to dig through the numbers as soon as they come out and we're going to tell you what the stocks are
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doing. and i will talk with the cfo of intel. but first, take a look at how we are in the markets today. nathan bacharach is with me, michael crofton of philadelphia trust company. gentleman, good to have you on the program, good to see you. >> let me kick it off with you, michael, because i know that you are beginning to sell today. >> i am. >> you sold into this rally? >> i did. i got a little bearish today and got bearish based on yesterday's move. when gold went down yesterday and the market followed, that correlation really bothered me. it indicated to me what was going to happen with the margin pulls, that you see hedge funds begin to liquidate. i thought that could feed on itself, so we began to take our toe out of the water yesterday. we continued that today. i just think that the market is really well ahead of the fundamentals. it's a contrived market and the fed is guilty for the contrivance and i just worry about it. >> so the only reason it worried you about gold going down on the same day that stocks went down is because you assumed that the
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hedge funds would be selling, getting margin calls, which you were right, getting margin calls on gold and then they would have to do something to raise cash, or sell stocks. >> they would have to take profit elsewhere, and where the profits are right now are in their equity positions and i think that's probably going to come out. >> fair enough. nathan, how do you see it? >> i don't think that the rest of the world is a hedge fund, maria. i think you had a terrorist act, and that was one fen. and then you had people playing where's waldo in terms of, why is it that gold went down yesterday. i do believe, as michael said -- >> intel, we have earnings per share of 40 cents a share on revenue of $12.6 billion on intel. just coming out, intel first quarter, i'm going to have you finish that in a moment, nathan. but the earnings per share expectations were 41 cents. we've got an earnings, a real earnings of 40 cents. the revenue estimate was 12.59 billion. we got revenue of 12.6 billion. let's get reaction. alex, i realize this is just a
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headline, but what's your reaction to these numbers for the first quarter of intel? >> -- that's what's showing through, even though they had a top-line beat. the 40 cents is, in fact, a miss to street expectations. and i think going forward, there are a lot of concerns over what margins are going to do for this company, especially as it ramps capex from $11 billion last year to $13 billion this year. so a tough quarter. it's been a record decline for pcs this past quarter, and i don't think it's going to get that much easier going forward here. >> in terms of the pc business, we know that pc sales are declining. we know that everybody's using a mobile phone for everything. does intel still get the same kind of oomph from the mobile business as it does from the pc business? how does that impact intel? >> well, right now the answer is very clearly no. they get some help from being the dominant provider of technologies to the clouds. so that's the good news for intel. the bad news is they have virtually zero footprint in smart phones and tablets, at
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least from a processing perspective and they've been showing very little progress on that front in recent quarters and years. >> okay. and would you put money to work in intel right here? how do you want to play this story? >> right now, the most attractive thing about intel is its 4% dividend yield. i really think it's going to be a market performer, just rising and falling with economic sen m sentiment here for the foreseeable future. and i think they need to put a mobile strategy in place that shows some real promise. >> that's a great point. certainly something that we will discuss with stacy smith, the cfo, coming up in the program. anything else you want to hear from stacy smith, alex? >> we really want to hear if and how they can get to their prior guidance for low single digits growth. pcs look like they're declining, yet the company's prior guidance was to get to growth for this year, and it just does not look like that's on the table for the company. >> we'll talk to stacy smith
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coming up. >> i want to get to this broader market. michael, you were making a good point there. please continue. then i want to ask you about earnings. >> gold had its own moment. no one knows what the intrinsic value of gold is. there's a big question mark there. it doesn't help when we print money, because the dollar has gone up in value over the last few years. it doesn't help for political instability. we've had plenty of that and gold hasn't gone anywhere. and it hasn't helped with inflation, because we don't have any of that. i think the only intrinsic value we've got left for gold is somewhere between "i love you" and "i'm sorry" as maybe a piece of jewelry. i think there's a big question mark on gold. and i think the stocks went down because of the terrorism in boston. >> i think michael is agreeing with you. >> today it took two steps down. the first step down was gold, the second step down was boston. boston came out of the market and went back to where we were when the market came down on the gold loss yesterday. >> listen, there's a lot of
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terrorism that's out there. take israel. they've got plenty of terrorism. and they've got more companies on the nasdaq than anybody else, except the united states. so i think long-term, americans get passed that one real fast, mike. >> i don't disagree, but i think that it was problem matic for t market. the market went down and we've gone up one stage today. >> yeah, we're getting the yahoo! numbers out here. revenues on yahoo! was $1.07 billion, versus an estimate of $1.1 billion. earnings just coming out now on yahoo!. this is for the first quarter. mike santoli, what can you tell us in terms of the characteristics of earnings so far in the first quarter? what are you hearing? >> reasonably okay. i don't think it's going to be a ho wholesale across the board shock if they don't dazzle. the blue chips confirmed what you wanted to see. i want to hear what intel has to say about whether they're kind of putting their stamp of ratification on this
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double-digit trend in pc sale declines. in the past, they've actually had issues with those industry trackers. i'm interested to hear. and i think earnings are okay, but i do think what happened yesterday is of some significance, simply because it was a bit of a deflationary whiff going through the air. we got that again with cpi today. i don't think it really builds into anything, but it does imply that the financial markets in general are on alert for that kind of slowdown, deflationary type move. >> i think that's a great point, mike. by the way, yahoo! first quarter earnings, 31 cents a share. the estimate was 24 cents a share. i want to bring in paul to talk a bit about yahoo! here. paul, your reaction to these numbers? the stock is trading up on yahoo! right now. what's your take on the quarter? >> first of all, i would have to peel back the onion and see what the difference is between 34 cents reported and 24 cents expected. that seems it might include some extraordinary items ton upside. >> for sure. that doesn't seem like it's apples to apples. you've got "x" items on the 34
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cents. but let me dig deeper into that. in terms of the revenue numbers, paul, what's your take there? you've got 1.07 billion in revenue for the first quarter. is that what you were looking for? >> yeah, that's about right. maybe a very, very slight miss. maria, my problem with this company is, even though the company has done particularly well, stabilizing the business under the ceo mayor, you have a company that's expected to continue to grow about 2% per annum and it's trading at 20 times earnings. and so the pop that we've seen in the stock over the last 12 months, it's up 60% versus 12% for the s&p 500, i think the pop has already been had. >> so, basically, you feel that the valuation has become extended. you want to sell yahoo! here at 23.80? >> i probably would. maria, remember back in the late '90s, we were on a television show together called market week. and that was back in '99. and we used to talk a lot about yahoo! back then. the problem with the story is, that was its final hour. now we're four, ten years later. it's just not even a tech leader
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anymore. >> wow, okay. well, we'll keep watching that. so you would sell yahoo! here. >> i probably would. >> i want to get to jon fortt. you just heard intel's first quarter numbers, by the way. in a moment i'll speak to the man behind the numbers in terms of intel. we'll talk to the cfo of intel, stacy smith, coming up. let me get to jon fortt to go through some of these numbers that we're just getting out. over to you, john. >> i want to talk first about yahoo!. as far as that non-gaap eps number, yahoo! says it's excluding stock-based compensation from its non-gaap eps numbers. we'll have to go back and recalculate, secluexcluding tha. a couple of other things, display advertising came in, ex traffic acquisition costs at $402 million. that's down 11%. search came out at $409 million. significant search came in ahead
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of display. that's down just 6% year over year, but still down. display as sold is down in terms of a number of units. that is significant. it's a number that marissa meyer acknowledged last quarter needs to come up. they need to get engagement up so they can sell more ads and a charge a premium for those ads. that's the only way their research accelerates. but that non-gaap eps number, don't know what it means yet. we have to go back and do an apples-to-apples comparison. >> thank you so much. we appreciate that. michael crofton, if you had to look at the earnings period first quarter to drive your investment ideas, would that be sufficient? >> no. one of the things about earnings that bothers me, these companies have been buying back tremendous amounts of stock over the past couple of years, which makes the earnings hard to compare. so while they've been good and look good on the surface, i think if you were to add back the stock that we took out of
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the market, they might not look as good. >> gentleman, thank you very much. appreciate your time tonight. just heard intel's first quarter. i'll talk to the man behind the numbers about the plan, intel cfo, stacy smith. then we take you live to boston. we'll get the very latest developments t s on the devasta bombing of the marathon. we'll talk to general barry mccaffrey about state of the country's safety right now and its psyche in the wake of the attack. back in a moment on "closing bell." ur guy around 2% to manage your money. that's not much, you think. except it's 2% every year. go to e-trade and find out how much our advice and guidance costs. spoiler alert: it's low. it's guidance on your terms, not ours. e-trade. less for us. more for you. and never back down. who believe the american dream doesn't just happen, it's something you have to work for. ♪ we're for those kinds of people. because we're that kind of airline.
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welcome back. earlier on the program, blackrock chairman and ceo larry fink told me he's still bullish on stocks. here's some of what he told me just now. >> i believe, if you look at corporate earnings, so far, about 85% of the companies reporting exceeded estimations. it's an indication of a stronger economy, it's an indication of corporations, you know, managing their expenses properly. so it does validate my long-term view, but if somebody told me we were going to have a 5% correction, i would say, look at that as an opportunity to get into the market. >> certainly the way investors are looking at it, once again,
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today. cnbc contributor, carol roth, says she's not buying the growth story. carol, eric, good to see you. carol, you say you're not buying the growth story. how so? >> i'm not, maria. i seem to be one of the lone voices out there that does not believe that this market is driven by growth. it is driven because of lack of alternatives and because of the fed. larry mentioned something about koch. well, yes, koch beat earnings by 1 cent, but if you look at the year over year revenue, they actually declined. so we have a lot of financial engineering. we have a lot of costs coming out of the cost structure. that is not sustainable. if we want to have growth multiples on an ongoing basis, the topline revenue for these companies needs to grow. and once the fed stops the printing press, if that growth doesn't catch up, then we'll be in a really bad position. >> when is the fed going to stop the printing press? >> i think that's the $64
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million or maybe trillion-dollar question. >> well, it is, but if it matters quite a bit, because if the fed is going to stop the printing press in a month, i want to stop stocks. if fed is not going to stop the printing press until 2016, i want to be invested. >> i agree with you. >> so if you're going to make that comment, you have to have a strategy, right? so when is the fed going to stop fingerprinti i the printing press? >> and i don't think that happens until later this area or maybe next year. so i think we have some run room here to be able to be invested, be invested smarlt, but you need to keep your eye on what the fed is saying, as well as be invested in the right types of companies. because if these companies don't start investing and don't start growing, we're not going to be able to sustain these multiples when that printing press gets shut down. again, i'm going to say, later this year or perhaps some time next year. >> very important point from carol right there. you've got to be invested smartly. that's basically what you're saying. you've got to be invested, but expect a correction at any time. why should i be invested if i'm
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expecting a correction? explain this. >> i think people have been waiting for a correction for quite some time. in fact, the people waiting for a big correction to come in are people waiting for goudeau, and in that play, goudeau never shows up. so you could be waiting for a very long time and you'll continue to miss the upside. >> what's your take on earnings? >> i think earnings are solid, but the bar has been lowered so low, it's hard to wiggle under it. the i think the reality is, i agree with the other guest, that this is not a growth story. this is a story of equities being able to maintain good value, see some price appreciation at a moderate to single digit price appreciation over the next year, and the fact that cash and bonds do not look very attractive from a return potential. >> well, cash and bonds, because if you're in bonds, in some cases, you're actually losing money when you factor in inflation. >> both cash and bonds are flat-out creating a negative real return. it will probably give you a zero
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rate of return. so you've got zero return, 2% inflation rate, you're losing 2% of your purchasing power. and it's been that way since 2009. the average investor in cash has lost 10% of purchasing power since its start in 2009. >> carol, if not stocks, where do i want to diversify into? >> i think it actually is stocks, maria, but i think it's the right type of stocks. and from my perspective, when i'm out there and talking to the average person, the person on main street, they aren't doing so well. the people who are wealthy or more well to do seem to be doing fine. so i'm putting my money behind names with that kind of long-term thesis, that the people at the high end of the income sector, whether it's luxury brands, whether it's brands that focus on leisure-time activities, those types of companies are the ones that will have the longer term opportunity to grow, while main street, perhaps, struggles for a longer period of time. >> where would you be betting right now?
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where do you want to put money to work? >> i think the state looks are awfully strong on a relative basis. but when you look within the market here, our funds are barbelled in the risk exposure. our largest two sectors overweights are health care and consumer discretionary. so, clearly, basically, health care is a play where at least in our minds, it's the most attractive priced defensive sector. >> even though we've seen a run-up in health care. >> we've seen a run-up in all defensive stocks. >> good point. >> eric carol, good to have you on the program, thank you so much. very much appreciate your time today. american airlines has grounded its entire fleet today because of a computer issue. hampton pearson with what we know right now regarding this story. >> as you mentioned, american airlines flights grounded across the country because of computer problems. the faa says american eagle flightses s s also part of tha? . we have just gotten the word, though, the computer system, in fact, has been fixed and american expects to resume
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flights in about 45 minutes. now, we did have pictures of what that ground stop has looked like from the dallas-ft. worth hub, the scene of american airline flights on the ground, being repeated at chicago o'hare and laguardia, as well. those planes still grounded, but expect to be taking off again in about 45 minutes, as we now know. passengers stuck on planes. others couldn't make reservations. passengers using social media to flood the airline with complaints. mike is another airport, of course, with a huge american hub, and the concourse there, even more crowded than usual. planes being held at the gates. and we now know, as we said, the computer problems have been fixed. those that were in the air were, in fact, allowed to land at their destinations. american apologizing to commerce for the inconvenience. saying travelers with flexible schedules, there would be no charge to change the reservation. it will also provide full refunds if those travel plans are not flexible, says the airlines. but none of those changes can
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happen until the computer system is fixed. we've now gotten the word, computer system fixed, american airlines now in the process of getting flights and travelers off the ground and on to their destinations. back to you. >> hampton, thank you very much. hampton pearson. up next, intel stock on the move in the extended hours. the chip giant's results out moments ago. stacy smith will be here to talk with me. still coming up, still more questions than answers. we'll go live to boston tonight and get the very latest on yesterday's deadly explosions at the boston marathon. back in a moment.
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with xerox, you're ready for real business. welcome back. earnings from intel and yahoo! out just moments ago. let's get back to jon fortt. he's been poring over the fine print and has the details. what did you learn, jon? >> i learned a few things. first of all, let's touch on yahoo!'s guidance. they're guiding for q2 revenue range between 0.16 and 0.19 billion. the street wanted $1.11. also, adjusted ebitda, they're adjusting to 370. looks a little low, what the street was wanting. if they wanted non-gaap eps of 27 cents. of course, those numbers all have to be adjusted to the new way that yahoo! is calculating eps. a couple of other things i want to touch on. they saw the worst year over year decline in display advertising in two years, more than two years, actually. but it's the fifth quarterly increase in search. now, search revenue bigger than
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display this quarter. on intel, i want to point out, the gross margin laooks to have fallen below intel's guidance. even though data center grew 5.75% year over year, gross margin was low. that's something i would ask stacy smith about. and we really want to hear about the impact of the pc business, given that they're taking down capital spending, $1 billion from what they said before, maria. >> we would definitely like to get into the pc spends and certainly the pc environment, because we know what's going on there. let's go inside intel numbers right now. joining me now is intel cfo, stacy smith, in a first on cnbc interview. mr. smith, good to have you on the program. how would you characterize the quarter? >> the demand environment played out as we expected, and i think the company executed well. as i just heard jon say, we saw fis growth in our data center business. it was up 7% year on year. and within the overall market for computing, we're seeing nice
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growth. and there's obviously a transition going on there, but i think we're well positioned for that as well. >> and shareholders certainly want to see change in terms of utilizing the balance sheet, which you've done quite well. we're going to get to that in a moment. but you said that the demand part of the story played out the way that you expected. in other words, you are expecting pc sales to go down? >> well, what we're seeing is a transition within the overall client category. and so if you think about it, what we're seeing is very robust growth in new form factors. things like ultra books, very thin and light, battery-efficient notebooks. things like convertibles, detachables. so we're seeing growth there and we're seeing some of the traditional categories of the market that are going to be down year on year. when you net all of that out for us, we do expect some unit growth this year. and the first quarter, i think, really played out, reinforcing our view of the market. >> we were just talking to one of the analysts covering your company, and he was sort of perplexed saying, look, we know that pc demand is down 11% year over year. we know that there's this shift,
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exactly what you're talking about, a shift towards smaller mobility-type products. and yet, they continue to stick to this growth projection, topline growth protection for the year. are you going to be able to make that or do you want to change your projections? >> no, we're even more confident in our projection. we're not forecasting a gang buster year, we're forecasting low single digit revenue growth. our data center business, which is really strong, we believe, will grow kind of double digits for the year, and that's 20% of our revenue. and then as i said, within the client category, what we see this transition going on. and we have new products that are really strong and leading our competitors in terms of this ultramobility category, so ultrabooks, detachables, convertibles. and we have a great lineup playing across windows and android tablets. so we have growth there, and it will offset what we see on more traditional form factor side of
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the pc business. >> what are your expectations in terms of capital expenditures? can you justify, for example, increasing your capex from $11 billion last year to $13 billion this year, knowing that pcs are going down? >> yeah. so, within capex, you have to dissect it a little bit. and we revised our capex guidance this quarter down to 12. within that, there's a couple of billion dollars of capital spending for the transition we're going to do in the back half of this decade, to 450 millimeter. so if you take that out, our capital being t on that's going to come into production over the next couple of years is actually down from about $12 billion to about $10 billion this year. if you look at it in terms of a percent of revenue, we're into the high teens. you compare us, you know, some of the people we compete, the tsmc or a samsung, we're spending about half of the capital as a percent of revenue that they are. and i think that's a real indication of how strong our process technology leadership is. we continue to really benefit from this transitions. so i think we're spending the right amount and we're going to get a great return for it.
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>> and in terms of managing the balance sheet, talk to us about what investors might expect, in terms of getting some of that cash. dividends, buybacks, what's in the cards? >> yeah, we've been very explicit about our priorities and i think we've really been a leader in this space. our priority, first and foremost, is to invest in our business. and we just talked about capex. i can't stress that enough. the $12 billion that we're distinction to invest in capital this year is really the core of our competitive advantage. it is the reason that somebody invests in us, is because we have this technology leader that manifests itself in products that lead our competition and it allows us to win in markets. behind that, what we've said is our priority is the dividend. and we're allocating 40% of our free cash flow to the dividend. i think if you look historically, you've seen a very nice cadence of dividend increases and i don't know where the stock price is over after-hours, but we're somewhere on the order of a 4% dividend yield, which i think not just leads tech, but is a leadership
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dividend level across large-cap companies. and behind that, we allocate money to the buyback. and we really use that as the second way to return cash to shareholders and to modulate our cash balance. that's been our strategy, that's what you'll continue to see us do. >> so certainly investors will like to hear that. bottom line, stacy, we all nowhere this market and going. what is intel's mobile strategy? >> you can really see it in terms of what's happening in the market today. so i don't have to poison to the future. we have a great lineup of products today in phones and tablets. we've won 11 phone designs across 20 countries. and what we're seeing now in the thirty appeared benchmarking of the chips that we're selling into those phones is that we're leading in performance. and i think people that know intel expect us to lead in performance. i think what's surprising people is we're not just leading in performance, we're leading in power efficiency. i think you'll see us bring out a next generation chip for the phone market in the back half of this year, that will further
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extend our position. we've got great products in android tablets and windows tablets, and this very strong position across ultrabooks, detachables, convertible,s, and a very strong position in the data center and the traditional pc market. is the breadth of product line has never been stronger. >> what kind of a 2013 are you expecting? >> we expect low single-digit revenue growth. we expect it's a year where we refresh our product line and win some iconic designs and some of these new areas of computing. and we expect a gross margin that's 60% for the year and in the back half of the year, back into the low 60s, which is kind of the high point of our historical range. >> i know you've got to jump to go get on the call with analysts. what's the headline on the analyst call that you're going to tell them? >> i think it's really just pointing to so far the year is planning out as expected. i think we're expecting well, and we're driving this
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transition in the market place, where we're moving the company to benefit from these lower power devices and then we benefit on the server side, building the infrastructure that serves all of those devices. >> certainly interesting time. stacy, good to have you on the program. >> thanks. >> stacy smith is the chief financial officer at intel. more big-name earnings out tomorrow that certainly can move your money. some of wall street's big money pros will be along telling us what they're focusing on, next. then, we'll take you live to boston. we want the latest on the investigation of yesterday's deadly marathon bombing and we will get it. stay with us on that.
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welcome back. president obama addressing the nation again earlier today on the boston marathon bombing. and he promised justice. >> it will take time to follow every lead and determine what happened. but we will find out. we will find whoever harmed our citizens and we will bring them to justice. >> scott cohn is leiv right now near the crime scene in the back bay section of boston. scott, what can you tell us? >> maria, with the next news briefing about 25 minutes away now, we can give you a little bit of news. first of all, nbc news is reporting that some fragments of the bomb or bombs are already at
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an fbi atf analytical center in quantico, virginia, where they ultimately hope to reconstruct both devices, or as much of them as we can. and while there are some grievous injuries here, the head of trauma at mass general says now he is much more confident this afternoon than he was this morning that there will not be further loss of life. three people, though, are dead. the final blocks of the marathon, going down boylston street are, according to people who have run this race, an incredible high, and of course, all of that was changed as you look at the video from the camera of runner jennifer tra treacy, that was shot yesterday. and authorities are looking for any sort of that video that they can get, as they continue to look for any and all types of clues. ge jean schmidt, a former ohio congresswoman, says she can't imagine that finish line being
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more secure. >> security was outsmarted. that's an unfortunate thing. the terrorists are going to take a path that is the path of least resistance. >> new york mayor rudy giuliani says look for more surveillance cameras at these types of events. >> these cameras are really necessary in the world that we live in. and if anything useful comes out of this horrible, horrible technology, it should be that we have to realize that this is not something we can just with come pla complacent about. >> security consultants who look at these types of events say that the entire calculus of protecting a marathon has changed. >> what we're going to find in the months ahead is that races will be done differently. they'll start looking at how do you better secure the start and the finish? and they'll have to do that within the context of taking
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control of the perimeter. >> again, the next fbi briefing or the joint briefing coming up at the top of the hour. we'll have full details. stay with cnbc. maria, back to you. >> thank you so much, scott cohn. joining me now is retired general, barry mccaffrey. he staugt international security studies at west point. he now heads his own consulting firm and a terrorism analyst for nbc news. general, good to see you. thanks so much for joining us. >> good to be with you, maria. >> what do you make of the fact that no one has claimed responsibility for the boston bombing. and at this point in time, it doesn't seem like we have any leads as to who's behind this? >> well, the administration is being very prudent. we've got to remind ourselves, in atlanta, we falsely accused a security guard and the initial reaction. so i think they're trying to puzzle through it. you would think it indicates a domestic, deranged attacker, at the end of the day, one or more,
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two devices, of course, is harder than one. these were not sophisticated foreign-made intelligence-provided devices. so, it's unusual that no one stepped forward and claimed credit. if it had been a foreign terrorist, you would have expected that to happen. >> so what's your gut feeling? knowing what we know in terms of how the bomb was made, the nails, how they were placed, do you believe this is homegrown terrorist, an organized group, sophisticated group? what does your gut tell you? >> look, it's not that hard to do, unfortunately. and when we look at the 25,000 or so killed a year in america, we've got enough homegrown criminal organizations, cartels, nut cakes that that's going to be our initial suspicion. having said that, one of the great failures of lockerbie, scotland, bombing was that if we find this was an organization the that had a connection to
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foreign support, iranian, north korean, you name it, we simply can't treat it as a law enforcement issue, where we have to prove the involvement of the president of the country or the dictator. we've got to make sure we understand these are acts of war if they're foreign inspired. but we won't know that until this forensic and evidential process has been completed. >> well, they say that they did a bomb sweep, right before the race. how foolproof are those bomb sweeps? and i mean, how is it possible that garbage cans were around as well? didn't we get rid of garbage cans for this very reason? >> well, you know, we'll find out more. the boston police are first rate. i know these big events are all scrutinized very closely. certainly, the brits understood, you've got to get rid of public trash cans. but i think, look, maria, it's astonishing to me that we haven't had this happen four times a year since 2007. mostly, it's a credit to local
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law enforcement. and by the way, we ought to add, thank god for the fbi and the cia, running both foreign and domestic counterterrorism operations. this open, free society, our sophisticated transportation systems, we're extremely vulnerable, and i think now what you're going to see, thankfully, is a renewed public sense of understanding, you simply have to report suspicious activity. >> all right. we will leave it there. general, always nice to have you. thanks very much for your insights. >> good to be with you, maria. >> we'll see you soon. general mccaffrey joining us. josh lipton rounding up all the action after the bell. that's next. and we're talking about which earnings reports you need to keep a close eye on for tomorrow. some huge names you need to know about. stay with us. we're back in a moment. ideas, goals, appetite for risk. you can't say 'one size fits all'. it doesn't. that's crazy. we're all totally different. ishares core. etf building blocks for your personalized portfolio. find out why 9 out of 10 large professional investors
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because we're that kind of airline. and we never stop looking for a better way. it's how we've grown into america's largest domestic airline. we are southwest. welcome aboard. welcome back. two of the biggest names in technology posted results within the past hour. josh lipton rounding up the day's movers and shakers. josh? >> hey, there, maria. yeah, lots of companies releasing earnings reports. coca-cola tops wall street estimates by a penny. also reporting a deal to unload distribution territory to five independent u.s. bottlers. johnson & johnson also in the green, reported better than expected first quarter earnings. growth for newer medicines for cancer, hepatitis "c," and blood clots. the stock hitting a record high, up some 19% just this year.
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or on the other hand, goldman sachs reports and beats the high end of analysts' expectations with, so why the selling today? jeff hart said the beat was private equity driven. the market doesn't give a lot of credit for that, hard to sustain, he says. finally, two tech names we want to mention. one is yahoo! which is getting slammed in the after-hours. the company beat on the bottom line, but second quarter guidance looks light, and steep decline in ad revenue scaring investors. and intel reporting better than expected earnings and revenue for the current quarter. the cfo saying on cnbc that growth in nontraditional products will offset pc decline. the stock was higher, but back now near the flat line. maria, back to you. >> josh, thank you so much. more biggies tomorrow, banks of america and american express will likely set the tone. what should we expecting in the numbers and how do you want to invest? nick raich and lee munson at portfolio asset management. good to see you guys.
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>> good afternoon. >> nick, you're the numbers guy, right? what's your expectation from b of a tomorrow? >> we're expecting better than expected numbers. kind of the trend we're seeing with most of the banks. revenue growth, pretty flat, but up a little bit from last year. we expect to see the beat, but it's all about the guidance and bank of america, in particular, we're looking for them to contain costs and particularly on the mortgage servicing business. if they can do that, that could help pave the way. but most of the second quarter guidance has been tame at best for the financials, which on a relative basis, relative to the other sectors, has been pretty good. the financials, most of the estimates are going down, but not down as much as the other sectors. >> so this stock has run away, right? bank of america has been one of the ones to own in this whole banking sector. do you think this, a lot the riding on these numbers? >> well, last year it went gangbusters, up over 100%. but this year it's lagging its peers. so it's only up about 5% year-to-date. so, whereas, its peers are up
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double digits. so it potentially has the ability to go higher from here and it could be a good entry point tomorrow for many investors. >> okay, that's something to watch, for sure. >> lee, let's talk about how you want to be investing around all these earnings. what is the chief investment officer do in terms of b of a stock right now? what do you want to see and how would you play it? >> well, i appreciate the numbers that nick's talking about. i want to see bank of america in their call confirm the macro guidance that we're seeing right now. because right now, i mean, we saw yesterday with gold, we're seeing stocks defensive, like johnson & johnson, do very well. so bank of america, back in 2009, maria, remember that was the only ticker that traders even cared about. the financials aren't leading the rally. we saw that with jpmorgan a little while ago. i think it's important that they say, yes, we are slowly recovering on delinquency. we are slowly having commercial guidance increase.
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that is important information, but for our clients, what we're really concerned about is, does the management of bank of america reflect what the fed is saying. does it reflect what home builders are saying? that's all i care about right now versus trading the stock. >> so what do you think? do you think it's going to confirm it? >> i believe that the earnings call is going to confirm. i think it's going to confirm it. do i think it's going to be a buy tomorrow? no, we're long american express. we like it. but i think if you see bank of america confirm that guidance, i don't think that we're necessarily in the environment where that's going to lead the market higher. bank of america might be up, but it's not going to set the tone and pace. it's not going to make the s&p hit a new high, just because bac says we're seeing what everybody else is. >> right, i understand. let's talk amex for a second. nick, american express already steady with its earnings report. should there be any different expectations this time around? what are you thinking about amex? >> it has some positive trends, certainly on the consumer side. credit has got been were the in the affluent consumer base of american express. so a third of the business comes
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from those transaction fees. and it's been positive trends, and we expect more of the same when it reports tomorrow. >> and do you think, in terms of how this stock has done, are you expecting a big reaction, if, in fact, we get good numbers? >> yeah, it's has double digit returns, both last year and so far year-to-date here. so we expect american express to do pretty well when it reports and expect it to go higher from here. >> and i know you already own amex. real quick, go ahead. >> i do. i think the only thing you have to remember on amex, is it's based on rich people buying expensive items, and we like that. we're long that concept. but just remember what happened a fewwith tiffany's, when you get that scare. when the affluent aren't buying as much. a lot of my clientsed that to write some big checks to the irs yesterday. so we want to make sure amex is still on the luxurious train and people are buying a lot of stuff at cartier. >> all right. we'll watch that. gentleman, thank you very much.
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>> thank you. >> we'll see you soon. nick, lee, thank you. more on what your money will be moved by tomorrow. our panel of top market pros weigh in next and get you set up for that opening bell. back in a moment. with the spark miles card from capital one, bjorn earns unlimited rewards for his small business. take these bags to room 12 please. [ garth ] bjorn's small business earns double miles on every purchase every day. produce delivery. [ bjorn ] just put it on my spark card. [ garth ] why settle for less? ahh, oh! [ garth ] great businesses deserve unlimited rewards. here's your wake up call. [ male announcer ] get the spark business card
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welcome back. we've got 30 seconds on the clock. our panel is with me to talk to us about what we need to know to be ready for tomorrow's opening bell. will the bounceback continue? gentlemen, thanks for joining us. brian, you're up, you've got 30 seconds on the clock. what do you want to be prepared for tomorrow? >> obviously we have a whole host of earnings announcements tomorrow that could move the markets. but what i'm most interested in as a fixed income guy is the fed's book tomorrow afternoon. we've had some difficult economic data here. we want to see if that trend is going to reverse itself. we think it's going to turn positive. we're optimistic on the economic outlook. we're looking for the book to confirm that. provide some more insight on the economy. we think the rally will continue here. >> all right. frank, you're up with 30 seconds. what do you want to look at tomorrow to prepare us?
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>> yeah, maria, we're going to be watching the eia report on oil supplies. recently, there have been a lot more supply of oil, much more for this time of the year. we expect that trend to continue. we've also seen a decline in oil prices which should help businesses and consumers as it works its way through the system by putting more money in the pocket. we're also going to be watching corporate earnings, coming in better than expected. we expect to see that continue for the rest of earnings season. lastly, the fed beige book which we expect to see moderate activity from, giving the fed no reason to change the stance. put it all together, we've got oil prices, good earnings, and a fed that's continuing to stimulate. >> got it. ward, you're up, what are you looking ahead to for tomorrow? >> as far as the beige book is concerned, i think that's the most important event. since the last one on may 6th, we've seen several indicators coming in below expectations. today we got a little bit of a change from that, thankfully. but the beige book will probably
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reflect a slower growth trajectory than we had with either the january or the march version when growth was described as being modest to moderate. i think there'll be some acknowledgment of a slowdown on the economy and of course inflation is still subdued. >> we'll watch all of that. thank you, we appreciate it. my thoughts next on fear. complacency and greed. stay with us. ity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
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my observation on fear, complacency and greed and where the bull market is right now. technicians for one who is a frequent guest on this program will tell you that this rally is a secular bull market. that means the sentiment and fundamentals behind this move higher could last quite a while. he says there are three stages to a secular bull market. the first stage is fear. and we have certainly seen a lot of that in this market. most people still see a correction, betting where the selloff will be right around the corner. phase two is secondary stocks. smaller names such as those within the russell 2000 index start rising. we saw a bit of that over the last year or so. the third stage is greed where you see valuations run away and begin to not make sense.
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we are not there yet, though. the priced to earnings ratio for the s&p 500 is looking forward 12 months of 14.3 times 12 month forward-looking earnings. rich peterson at capital iq says compare that to the haydays of the 1990s when the market was soaring. the december 1998 earnings were trading at 34.6 times earnings. it does not appear this market has entered the final stage of speculation given those valuations and, by the way, guinn t given the fact they will tell you this has been led by deep pockets rather than the retail investor buying at the top which is sadly usually a telltale sign of a market topping out. tonight we heard from more s&p 500 companies intel and yahoo reporting the earnings, both respectable, both beat estimates, though yahoo warned on guidance. that's why i do question some of the lofty expectations for earnings growth moving forward. later in the year, the expectations are moving up. particularly with this anemic
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growth story for the economy. with the federal reserve still firmly in place providing stimulus and this market in a stage of fear, i would have to that buy on the dip mentality rules the day. we certainly saw an example of that once again today. have a great night, everybody, thank you so much for being with me. i will see you on friday in washington tomorrow with axel weber. "fast money" begins right now. live from the nasdaq market site in new york city's time square, i'm melissa lee. here's what "fast" is following tonight, yahoo and intel start their conference calls this hour. monitoring them for their quarterly results and trading it. fool's gold, the precious metal closing higher after falling 14% in the prior two sessions. is this a sign of a bottom? we get answers from the commodities king himself. and land grab, why the rising housing stocks may be deceiving

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